Practical Problem 04

4. From the following Trial Balance of Nandini & Co. as on 31st March 2019.
Prepare Final Accounts after considering the adjustments given below.
Particulars	Debit Amount (₹)	Credit Amount (₹)
Loose Tools	1,10,000
Furniture & Fixtures	81,000
Bad debts	1,400
Sundry Debtors	81,600
Stock (31st March 2018)	52,000
Purchases	77,000
Sales Cash		21,000
Sales Credit		81,000
Returns	400	600
Advertisements	4,800
Rate taxes & Insurances	6,000
Repairs & maintenance	1,200
Salaries (2/3rd for factory)	18,000
Rent (Paid for 11 months)	2,200
Machinery (Includes ` 24,000 purchased on 1st Oct. 2018 )	84,000
Capital		3,60,000
R.D.D.		8,000
Sundry Creditors		70,000
Drawings	14,000
Interest		1,200
Dividend		2,800
Bank Balance	40,000
Royalty	6,000
9% Bank loan (30th Sept 2018)		40,000
Carriage Outwards	4,000
Discount	1,000
	5,84,600	5,84,600
Additional information :
1) Closing stock valued at ` 1,00,000
2) Write off ` 2,000 as bad debts and create a provision for doubtful debts @ 5% on Sundry Debtor
3) Depreciate Machinery by 10% p.a. and Loose Tools is valued at ` 1,00,000
4) Charge Interest on Capital @ 2% p.a.

Solution:-
In the books of Nandini & Co.
Trading and Profit & Loss A/c for the year ended 31st March 2019
Particulars	Amount	Amount	Particulars	Amount	Amount
To Opening Stock		52,000	By Sales	21,000
To Purchase	77,000		Add :Credit Sales	81,000
Less: Return	600	76,400	Less: Returns	-400	1,01,000
To Salaries (2/3rd of 18,000 )		12,000	By Closing stock		1,00,000
To Royalty		6,000
To Gross Profit		55,200
		2,01,600			2,01,600
To Interest on Capital		7,200	By Gross Profit b/d		55,200
To Repairs & maintenance		1,200	By Old R.D.D	8,000
To Salaries (2/3rd for 18,000)		6,000	Less : New Bad Debts	-1,400
To Rate taxes & Insurances		6,000	Less : New R.D.D	-3,980
To Advertisements		4,800	Less : Old Bad Debts	-2,000	620
To Rent (Paid for 11 months)	2,200		By Interest		1,200
Add : Outstanding	200	2,400	By Dividend		2,800
To Interest on Bank Loan		1,800
To Discount		1,000
To Depreciation :
Machinery	7,200
Loose Tools	10,000	17,200
To Carriage Outwards		4,000
To Net Profit Transferred to capital A/c		8,220

		59,820			59,820


Balance Sheet as on 31st March 2019.
Liabilities	Amount	Amount	Assets	Amount	Amount
Capital	3,60,000		Debtors	81,600
Less :Drawings	-14,000		Less : Old Bad Debts	-2,000
Add: Interest on Capital	7,200		Less : New R.D.D	3,980	75,620
	3,53,200		Furniture & Fixtures		81,000
Add : Net Profit	8,220	3,61,420	Closing stock		1,00,000
Outstanding Rent		200	Machinery	84,000
SuSundry Creditors		70,000	Less: Depreciation	-7,200	76,800
9% Bank loan (30th Sept 2018)	40,000		Loose Tools	1,10,000
Add: Interest	1,800	41,800	Less: Depreciation	-10,000	1,00,000
			Bank Balance		40,000

		473420			473420